NEW YORK – FTX received court approval of its bankruptcy plan on Oct 7, which will allow it to fully repay customers using up to US$16.5 billion (S$21.5 billion) in assets recovered since the once-leading crypto exchange collapsed.
The plan is built on a series of settlements with FTX customers and creditors, US government agencies, and liquidators appointed to wind down FTX’s operations outside the United States. The settlements allow FTX to use its assets to repay customers of its crypto exchange first, before paying potentially competing claims filed by government regulators.
FTX plans to repay 98 per cent of its customers – those who held US$50,000 or less on the exchange – within 60 days after the plan’s effective date, which has not yet been determined.
FTX has estimated that it will have between US$14.7 billion and US$16.5 billion available to repay creditors, enough to pay customers at least 118 per cent of the value in their accounts as of November 2022, the date that the company filed for bankruptcy.
It remains in talks with the US Department of Justice (DOJ) over US$1 billion that the government seized during the criminal prosecution of Bankman-Fried. FTX shareholders – like Singapore’s Temasek – who would normally receive nothing in a bankruptcy proceeding, could receive up to US$230 million from the funds seized by the DOJ, according to court documents.
Temasek already said in 2022 it would write off its US$275 million investment in FTX “irrespective of the outcome of FTX’s bankruptcy protection filing”. It held a 1.5 per cent stake in FTX, with the investment making up 0.09 per cent of its $403 billion portfolio as at end-March 2022.
Once among the world’s top crypto exchanges, FTX collapsed after news surfaced that founder Sam Bankman-Fried took customer money to
